Respuesta :
the callable bond price if the yield to call is 7.9% will be: $1,059.64
N - 4.00
I/Y - 3.95%
PV -
PMT - $38.00
FV - $1,076
A callable bond is a debt security that can be reclaimed early by the issuer before its maturity at the issuer's discretion.
A callable bond allows companies to pay off their debt early and benefit from favorable financing cost drops.
A callable bond helps the issuer, and so financial backers of these bonds are compensated with a more attractive loan cost than on otherwise similar non-callable bonds.
A callable — redeemable — bond is typically called at a value that is somewhat above the par value of the debt. The earlier in a bond's life expectancy that it is called, the higher its call value will be. For example, a bond maturing in 2030 can be called in 2020. It may show a callable cost of 102. This cost means the financial backer gets $1,020 for each $1,000 in face value of their venture. The bond may also stipulate that the early call cost goes down to 101 after a year.
to know more about assets, equity and debt click here:
https://brainly.com/question/11556132
#SPJ4
